The Web Changes French DM Agency Operations

PARIS -- The advent of the Internet in France hurt many French DM agencies, as bewildered clients raised on the Minitel and confident of French technological superiority, looked elsewhere for help with the Web.

Budgets became skewered as the old ways of pitching for a direct mail campaign went by the wayside. More money went to telemarketing agencies, which have grown more strongly than pure DM shops.

Convergys, an American call center operation, has invested heavily in databases and data mining in France, and will be a strong presence on the Web. Management consultants like Anderson are getting bigger budget shares.

"They've been around for a long time," said Christian Renard, owner of Mediavente, one of the best established DM shops in Paris, "and they're now partnering with [information technology] people to get a larger slice of the budget pie.

"IT service companies are the noisiest. They're all telling clients they know everything there is to know about customer relationship management, which is not legitimate in my opinion. You'd think DM people would have a bigger voice here."

Web and interactive agencies are growing fast, fueled by a real flow of IPO and venture capital money. Group D, for example, used a successful IPO to expand from call center to management consultant and list broker, buying Worldwide Media in the United Kingdom in the process.

Established agencies like Grey Direct set up a Web agency inside its group. "We have a Web network that covers all of Europe," said French managing director Philippe Ceyrac.

The company also maintains a traditional DM agency that helps clients integrate the Web into the management structure of client companies.

The Minitel, France's online system developed in the 1980s as an electronic phone book, which is in millions of French homes, is pretty much over, Ceyrac said.

With PCs and multimedia spreading into households and teen-agers all online in school, the Internet is becoming a major force in France, he said. And it is a force that is changing how agencies operate.

"I think the key thing in this new economy is that the Web has become a matter for top management," he said. "When we talk about DM we are going from tactics to strategy, and that is a very big shift because we can work the same yard as management consultants and IT companies."

Renard prepared for the shift earlier than most, dividing his agency into four groups -- project management, business intelligence, strategic marketing and operational marketing.

He cited a joint venture between Generali, a giant Italian insurance company, and a major French pension fund as an example for project management. "We were asked to run what was in effect a new company," he said.

The pension fund had 1 million members, Generali money and insurance products it wanted to sell.

"They lived on our premises and we did everything from strategy, building databases, data mining and all the strategic and operational marketing that required," Renard said. "We acted as an incubator." Two years later the joint venture had 100,000 customers.

This kind of venture, Renard noted, requires a new type of contractual agreement for DM agencies. "We have to dedicate manpower to this project all year round, and our clients recognize that we are giving them a new structure and that they will have to pay for it," he said.

"This is a very transparent way of operating in a climate where the frontier between clients and service providers is moving all the time and becoming very flexible."

The nature of the value that a DM agency like his delivers has also changed, Renard said, because the mix of services is different and now includes strategy and vision, project management and creativity.

In turn, that requires a new breed of employees for French agencies, and indeed for global DM agencies. "We need more consultants, IT specialists, statisticians, telemarketers and Web experts," he said.

As a result, Renard sees his own role "more and more as an identifier of talent" that can handle his agency's new requirements.

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